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The Effects of Vintage-Differentiated Environmental Regulation

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Author Info
Stavins, Robert

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Abstract

Vintage-differentiated regulations (VDRs) are standards that are fixed with respect to the date of entry of regulated units, with later vintages facing more stringent standards. VDRs play prominent roles under major Federal, state, and local environmental laws. This paper synthesizes what is known about the effects of environmental VDRs, and develops lessons for public policy and for research. Economic theory suggests that such age-discriminatory regulations retard turnover of the capital stock, drive up the cost of environmental protection, and can increase pollution levels. Empirical studies validate theoretical predictions that VDRs delay replacement of durable goods, and thereby increase aggregate pollution abatement costs. In some cases, empirical studies also validate the perverse consequence that environmental progress is itself retarded.

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Paper provided by Resources For the Future in its series Discussion Papers with number dp-05-12.

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Date of creation: 31 Mar 2005
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Handle: RePEc:rff:dpaper:dp-05-12

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Related research
Keywords: vintage-differentiated regulation; new source review; cost-effective environmental regulation;

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Find related papers by JEL classification:
Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation
Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Costs; Distributional Effects; Employment Effects
Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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References listed on IDEAS
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  1. Anthony Heyes, 2009. "Is environmental regulation bad for competition? A survey," Journal of Regulatory Economics, Springer, vol. 36(1), pages 1-28, August. [Downloadable!] (restricted)
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